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Misspelling Doesn't Slow Amperif Bid for Exposure

February 14, 1988|JAMES BATES | Times Staff Writer

CHATSWORTH — Back in 1971, Keith S. Tattersall and his partners wanted to name a company they were starting American Peripherals, or some shortened variation.

The only problem was that the company's lawyer spelled it with an "f" instead of a "ph" when he registered it. The result was Amperif Corp.

Despite the goof, Tattersall and his partners kept the name. Since then, they've made it the only name of note in the relatively small market of supplying disk-drive data storage systems used in the 1100 model mainframe computer formerly made by Sperry Corp. and now made by its successor, Unisys Corp. (Unisys was formed in 1986 when Sperry was bought by Burroughs Corp.)

Amperif's hold on the Unisys market seems fairly secure. Last year, Tattersall said, the privately held company rang up $35 million in sales. This year, thanks to an exclusive supply contract with Unisys, the company expects revenue to soar 63% to $57 million and net income to be about $4 million, he said.

But to keep growing, Amperif expects by year's end to enter the high-stakes International Business Machines market and try to supply its disk-drive systems to IBM customers. Tattersall, who is chairman and chief executive, estimates that the potential IBM market for the company is from $50 million to $100 million in revenue a year.

Formidable Competition

But, here, its chances for success are less certain. Amperif would compete against such formidable companies as National Advanced Systems, Amdahl, Memorex, a recently revitalized Storage Technology and IBM itself.

Besides facing tough competition, Amperif also must set up a major distribution network for its product, either by making an agreement with a computer equipment distributor or setting up its own system.

"Growth like this is always hazardous. As you grow, you become more exposed to other competitors going after the same IBM business. It's a whole new marketplace," said James N. Porter, publisher of the trade publication Disk/Trend Report in Mountain View, Calif.

Amperif's disk-drive data storage systems typically sell for $250,000 to $300,000 each and look something like large kitchen refrigerators when assembled.

Stacked inside are as many as 16 hard-disk drives, mostly bought from Control Data Corp. in Minneapolis, that are each the size of large shoe boxes and use magnetic heads to read and write information on rigid platters. The collection of disk drives can store some 16 billion characters of information.

Amperif's system attaches to mainframe computers, which are the big, powerful machines that operate hundreds of times faster than smaller computers and are used for such large tasks as processing the payroll for major corporations or storing records for large banks. The Unisys mainframe computer for which Amperif sells its data storage products can range in price from $1 million to $10 million, Tattersall said.

Amperif owes much of its success, to date, to carrying out something akin to a high-tech guerrilla war. In 1976, it started competing against giant Sperry for the data-storage system business. Eventually, it came up with a version that used smaller, 8-inch disks rather than the larger, 14-inch ones Sperry was using.

The smaller disks made the whole data storage system smaller, which customers preferred because it took up less space in their offices and required less air conditioning to cool the room housing such powerful machines. Sperry realized the advantages as well and signed Amperif in 1986 to an exclusive contract as a supplier, which Unisys, based in Blue Bell, Pa., has decided to retain.

More important, the Unisys deal gave Amperif national credibility as a supplier. Now, it is trying to get a similar contract with Control Data.

Although Control Data is a struggling computer giant, Tattersall believes that there is a good opportunity to supply data storage equipment for the company's large computers. Last year, Amperif introduced a data storage system for Control Data computers, hoping to pressure the company into the same kind of contract it has with Unisys.

'Take Business Away'

Tattersall confidently predicts that Control Data will come around.

"We have to demonstrate to them we have a good product by taking business away from them," he said.

But it's clear the IBM market is what appeals to Tattersall most, although he concedes that it also will require extensive planning. When mainframe computers break down, it's a major crisis for many customers. As a result, Amperif will have to establish an elaborate service system that can respond instantly to any failures.

"If you can't respond in less than two hours, nobody wants to even talk to you," Tattersall said.

Consulting Firm

Tattersall and two other men started Amperif as a consulting firm in 1971. In 1976, the men, along with another executive, decided to turn Amperif into a manufacturer.

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